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7 ways to raise financially healthy children


Helicopter parents hover over their young like brooding hens, forgetting the fact that their eggs hatched (into millennials) several years ago.

The effects of helicopter parenting on millennials (also known as Generation Snowflake), are devastating. Psychological studies show decreased independence, a deficit of coping strategies, anxiety and depression. Children raised by helicopter parents seem unable to think for themselves. They suffer from a curious mixture of helplessness and entitled narcissism.

The toxic cocktail of entitlement and helplessness is disastrous for children’s future financial habits. Helicopter parenting denies them the opportunity to learn financial management for themselves, because Bank of Mum and Dad has always taken care of everything. Add to this the hunger for the latest iPhone, handbag or car, and you have a generation recklessly overspending and incapable of taking the reins of financial mastery.

We’ve put together seven tricks for you to make sure that helicopter parenting doesn’t land your children in the red.

1: Let your children make mistakes

The successful man will profit from his mistakes and try again in a different way.
Dale Carnegie (1888 – 1955), legendary business guru.

This ancient axiom is counter-intuitive to helicopter parents, who often go beyond ‘fixing everything’ by implementing prophylactic measures that ensure no mistakes are made in the first place. Yet the best way to respect the blade of a knife is to experience the pain of a cut.

If your kids want to spend all of their money on the new Playstation or the latest trainers, and you know that doing so will mean they’ll be miserable and penniless for the next few weeks, don’t stop them. Let them learn for themselves that splashing out has consequences.

As Mary Hunt, bestselling author of Raising Financially Confident Kids says:

When your kids have enough money to buy something and make a dumb mistake, you have to let them do it—and suffer or enjoy the consequences of their decision.

2: Butt out of key life decisions

Helicopter parents were dealt a decisive blow earlier this month when the chief executive of UCAS told them to “butt out” of university open days. Oxford University went a step further, by segregating parents from children at their open days, saying that helicopter parents no longer let their children explore their own options.

Butting out is a principle that begins at an early age. It starts with involving young children in decision-making (which shoes to wear, which musical instrument to focus on, what shall we do today etc.). Helicopter parents, though motivated by love and concern, impair their children’s coping skills by never letting them sit at the wheel of their own lives.

Butting out sets your child free, building what psychologist Chris Segrin has called ‘self-efficacy’ in every aspect of their lives – including their finances.

Beyond financial management, butting out can also increase your child’s earning capacity, because their careers won’t suffer the negative consequences of helicopter parenting.

3: Let your children manage their own money early on

In order to ‘butt out’ of your kids’ money management, you need a way of giving them financial autonomy, within safe, but non-intrusive, limits.

Soldo is a spending account for the whole family, which allows you to do just that. It’s a unique and powerful triad composed of:

  1. A secure cloud account that you can load from your UK debit card or bank account;
  2. A MasterCard (or cards) in your name and those of any household members (aged 8 and up);
  3. A snappy app that allows you to check your family’s balances in real-time and track everyone’s spending with notifications and crystal clear stats.

Your kids will learn financial management as they spend. You can control their budget from the respectful distance of your smartphone. The app allows you to tailor the degree of helicopter parenting that you exert over their finances. You can opt to receive notifications every time they spend (“Matthew spent £4.19 in McDonalds” – again), and even automatically lock the card if they spend too much.

You can set up pocket money or allowance payments as standing orders, and set budget limits if you think your children need help to stay within a safe spending range. The money sits safely in your secure cloud account and you can transfer it instantly to the virtual wallets of your children or spouse (or nanny).

If your children have a smartphone, they can download the app too and set their own budget limits, laying the foundation stone for financial literacy and independence.

5: Take your children on financial field trips

For children born in the age of Ocado, Amazon and online banking; money – and the journey it makes from pay cheque to shop – can be harder than ever to understand.

Even if you rely on these magnificent inventions to keep you sane, it’s a good idea to take young kids on financial field trips, particularly to the supermarket and the bank.

Let them watch you deposit cash, and show them how to use a cash machine. Explain the role that banks play in our lives, in age-appropriate language. Show them leaflets for different financial products; tell them about credit cards, debit cards, ISAs and mortgages.

Do your weekly supermarket shop with them, ask them to read out the prices of your regular purchases. Use special offers and bulk buys to explain the tension between cash flow and savings: “These avocados are three for two, but we don’t even need two avocados, let alone three, so it’s actually just a trick to make you buy more.”

It’s often surprising that the things we find boring (or frustrating) are actually fascinating for kids, because they represent a world that is grown-up, and therefore exciting.

6: Pay your teen a monthly (not weekly) allowance

While it’s unrealistic to expect an 8-year-old to manage a monthly budget, you can start lengthening the time between allowance payments once your child reaches secondary school. Start with a fortnightly allowance and, once they’ve got the hang of budgeting, step up to a regular monthly allowance.

Make sure they know that you won’t give them an advance if they’ve spent all their money by the end of the month. Don’t think of this as punitive; it’s just a way of letting them learn by their mistakes (see point 1).

If your children have been used to managing their own monthly budget from the age of, say, 15, they’ll be expert money managers by the time they go to university. Soldo is the perfect solution for this – they can set their own weekly budgets to help them stay flush until the end of the month.

7: Let your children be bored

Helicopter parents, anxious to ‘give their children the best possible start’, draw up detailed schedules for their children, viewing ‘unleveraged’ time as a tragically missed opportunity.

Perhaps they have Kipling in mind, who wrote:

If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it.
And—which is more—you’ll be a Man, my son!

The irony, of course, is that Kipling wouldn’t have been Kipling if all of his childhood minutes had been filled with sixty seconds of distance run (or Mandarin, maths, violin, karate, ballet and fencing). One thing’s for sure, Kipling didn’t have an iPad.

In the last few years, psychologists have increasingly stressed the importance of boredom in childhood. Left to explore the landscape of their own minds, creativity blossoms, ideas flow, problems are solved, and children learn to rely on themselves.

Capital isn’t so important in business. Experience isn’t so important. You can get both these things. What is important is ideas. If you have ideas, you have the main asset you need, and there isn’t any limit to what you can do with your business and your life.
Harvey Firestone (1868 – 1938), American industrialist.

The impact of boredom on future financial independence is manifold and palpable. Creativity, problem-solving and self-reliance impact hugely on earning potential. These are the qualities that separate leaders from followers in any field.

Learning to be alone contributes to positive mental health, which leads to greater achievement in every sphere of living. And, through boredom, the child learns to take charge of their own life, gaining a sense of responsibility over everything, including their finances.

With the right approach (and a Soldo account), you don’t have to be a helicopter parent to keep your children on the right path. Butt out (within reason), and let your children find their own way. Offer directions but not decrees; structure, not constrictions.
When your children fly the nest, you’ll sleep better knowing that they have the skills and the mindset to manage their finances, and face anything that life throws in their path.